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Jan 31, 2023
Zuora Q4 2023 Earnings Report
Announced financial results, exceeding guidance across operating metrics and balancing growth with profitability.
Key Takeaways
Zuora reported solid Q4 2023 results, exceeding guidance in revenue, free cash flow, net dollar retention, and non-GAAP operating income. Total revenue increased by 14% year-over-year, with subscription revenue up by 16%. The company continues to execute its land and expand strategy, focusing on billing, revenue, and subscription management solutions.
Total revenue was $103.0 million, up 14% year-over-year.
Subscription revenue reached $89.5 million, a 16% increase year-over-year.
GAAP loss from operations improved to $23.7 million compared to $34.2 million in Q4 2022.
Free cash flow was negative $20.1 million, compared to $7.6 million in the fourth quarter of fiscal 2022.
Zuora
Zuora
Zuora Revenue by Segment
Revenue by Segment
Subscription Revenue
CapyFin.com Forward Guidance
Zuora provided guidance for Q1 and full fiscal year 2024, anticipating subscription revenue between $88.0M - $89.5M for Q1 and $374.0M - $384.0M for the full year. Total revenue is expected to be $101.0M - $103.0M for Q1 and $428.0M - $440.0M for the full year.
Positive Outlook
- Subscription revenue for Q1 is projected to be $88.0M - $89.5M.
- Total revenue for Q1 is expected to be $101.0M - $103.0M.
- Non-GAAP income from operations for Q1 is guided at $4.0M - $5.0M.
- ARR growth is anticipated to be 12% - 15%.
- Dollar-based Retention Rate is expected to be 107% - 109%.
Challenges Ahead
- Guidance is subject to various important cautionary factors.
- Tax-related and acquisition-related expenses associated with the acquisition of Zephr Inc Limited (Zephr) are expected to impact free cash flow.
- Costs associated with the workforce reduction approved in November 2022 will affect free cash flow.
- Lower billings related to the macroeconomic environment including extended deal cycles are anticipated.
- Stock-based compensation expense cannot be reasonably calculated or predicted at this time, making reconciliation of non-GAAP income from operations to GAAP loss from operations difficult.